The ZEW’s May survey showed no change to the dim view investors have about Germany’s immediate economic future, but respondents expressed less pessimism than expected about the current situation in Europe’s biggest economy and even a touch more optimism about the Eurozone as a whole.

The ZEW’s forward-looking economic sentiment indicator for Germany this month was unchanged from the -8.2 reading in April, which matched economists’ forecasts. It remained at the lowest level in more than five years.

The release of the survey results coincided with the publication of Eurozone industrial production and GDP data, and markets generally ignored the lot.

Good German trade and manufacturing data last month failed to improve the expectations of investors, according to ZEW President Professor Achim Wambach.

“The effects of the relatively positive values for German exports and production in March 2018 have been overshadowed in the most recent survey by uncertainty motivated by recent political events,” Wambach said. “The US decision to back out of the nuclear treaty with Iran and fears of a further escalation of the international trade conflict with the US, as well as a further rise of crude oil prices, have had an overall negative impact on economic expectations in Germany.”

The Sentix index of investor confidence in Germany last week fell for the fourth straight month and dropped to its lowest level since September 2016.

Earlier today, Germany’s statistics office said Q1 GDP grew at an annual work-day-adjusted rate of 2.3pct, which was slightly lower than the forecast of 2.4pct and below the 2.9pct rate for Q4 2017.

On the back of the latest GDP data, Germany’s economics ministry said country’s upswing remains intact, and the economy will continue to grow, but possibly at a slightly slower pace.

VP Bank Group Chief Economist Thomas Gitzel said, “At the moment, there is no solid indication of an accelerated cooling-off of economic growth. The employment situation is terrific, companies are investing more again, and the construction sector is excelling with full order books.”

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